Kellogg Co. (K) is out to enhance its Customer Relationship Management (CRM) and in connection to that has decided to join with Epsilon, a subsidiary of Alliance Data Systems Corporation (ADS).
Epsilon is the industry's leading marketing services firm that provides better marketing solutions taking into consideration the consumer’s insight on a regular basis.
The two companies have entered into an agreement in which Epsilon has agreed to build and host a global real-time consumer web portal and preference engine where consumers will be able to get update on Kellogg's various products across North America, Latin America, Europe and Asia Pacific. Such information will also be reached through multiple channels including email, web and mobile.
The project also includes building a common platform where marketing people would communicate with consumers and carry out extensive research, trying to understand the consumer behavior. Management at Kellogg feels that Epsilon's marketing solutions will help strengthen Kellogg’s relationship with its large consumer base.
Kellogg posted better-than-expected second-quarter 2011 earnings of 94 cents per share, surpassing the Zacks Consensus Estimate of 91 cents. The earnings also increased 19% year over year from 79 cents delivered in the prior-year quarter. Net sales for the quarter jumped 11% to $3.4 billion, which exceeded the Zacks Consensus Estimate of $3.3 billion. Operating profit soared 12% to $543 million.
The company increased its full-year 2011 internal net sales growth guidance to a range of 4% to 5%. The increased net sales outlook is expected to offset anticipated higher cost pressures. It also reaffirmed its full-year 2011 guidance of currency-neutral earnings per share growth in the low single-digit range. Assuming no foreign exchange impact, this implies earnings per share within the range of $3.33 to $3.40.
The partnership is expected to boost the earnings further. Moreover, the company estimates a foreign exchange benefit of approximately 9 cents per share, which would result in reported 2011 EPS of $3.42 to $3.49.
Headquartered in Battle Creek, Michigan, Kellogg engages in manufacturing and marketing of ready-to-eat cereal and convenience foods. General Mills Inc. (GIS) and Ralcorp Holdings Inc. (RAH) are its competitors.
Currently, Kellogg holds a Zacks #2 Rank, translating into a short-term Buy rating. On a long-term basis, we maintain a Neutral recommendation on the stock.
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